China to buy $1.8 bil­lion of US soy­beans

Cus­tomers in China have agreed to buy nearly $1.8 bil­lion worth of soy­beans from the US, to­tal­ing 146 mil­lion bushels.

The US Soy­bean Ex­port Coun­cil (USSEC) made the an­nounce­ment this week, and said the com­mit­ment was made at the or­ga­ni­za­tion’s Global Trade Ex­change in In­di­anapo­lis.

Now soy­beans sold to China are the largest US agri­cul­tural ex­port.” Fred Gale, econ­o­mist at USDA

“China has a pref­er­ence for US soy­beans be­cause of its con­sis­tency and qual­ity,” said Xiaop­ing Zhang, China coun­try di­rec­tor for the coun­cil in an in­ter­view Thurs­day. “China first started im­port­ing soy­beans from the US in 1995 with 140,000 met­ric tons. By 2015 US soy­bean ex­ports to China to­taled about 30 mil­lion met­ric tons.”

Illi­nois, Iowa and Min­nesota are among the top soy­bean pro­duc­ing US states.

China was a net ex­porter of soy­beans un­til it be­gan im­port­ing large vol­umes of soy­beans and prod­ucts in the mid-1990s, said Fred Gale, an agri­cul­tural econ­o­mist at the US Depart­ment of Agri­cul­ture (USDA).

“Now soy­beans sold to China are the largest US agri­cul­tural ex­port as their value rose from about $400,000 an­nu­ally dur­ing 1996-97 to as high as $14.5 bil­lion in 2014. Last year the value fell to $10.5 bil­lion due to de­clin­ing prices and China’s shift to­ward ex­ports from Brazil,” Gale said. Other coun­tries that sup­ply soy­beans and soy prod­ucts to China in­clude Ar­gentina and Canada, said Zhang.

Soy­beans orig­i­nated in South­east Asia and were first do­mes­ti­cated by Chi­nese farm­ers around 1100 BC. “China pro­duces about 12 mil­lion met­ric tons of soy­beans,” noted Zhang.

China’s soy­bean pro­duc­tion has been stag­nant or de­clin­ing at about 12 mil­lion met­ric tons, Gale said. “Chi­nese farm­ers pre­fer to grow more prof­itable crops like corn and rice,” he added.

China’s do­mes­tic soy­beans are used mainly for two pur­poses, ac­cord­ing to Gale. “Non-GMO (ge­net­i­cally mod­i­fied or­gan­ism) soy­bean oil and food prod­ucts like tofu and soy­bean milk. Im­ported soy­beans sup­ply most of China’s cook­ing oil and the pro­tein in an­i­mal feed. Most of China’s im­ported soy­beans are ge­net­i­cally mod­i­fied while China does not al­low GMO soy­beans to be pro­duced do­mes­ti­cally,” he said.

Last year, US soy­bean farm­ers ex­ported a record 62.88 mil­lion met­ric tons of soy and soy prod­ucts, val­ued at $27.7 bil­lion, a record high, ac­cord­ing to the USSEC. Econ­o­mists are pre­dict­ing even more for 2016.